Corrigendum to Circular No. 07 dated 31st December, 2018 issued vide endorsement No. PS/CST/Circular/2018/GST/ 4057-67-Reg. - GST - States - 16

GOVERNMENT OF JAMMU AND KASHMIR, STATE TAXES DEPARTMENT, EXCISE AND TAXATION COMPLEX, RAIL HEAD, PANAMA CHOWK, JAMMU. Circular No. 16 Subject : Corrigendum to Circular No. 07 dated 31st December, 2018 issued vide endorsement No. PS/CST/Circular/2018/GST/ 4057-67-Reg. Vide serial number 5 of Circular No. 07 dated 31st December, 2018, it was clarified that the taxable value for the purposes of GST shall include the Tax Collected at Source (TCS) amount collected under the provisions of the Income Tax Act as the value to be paid to the supplier by the recipient is inclusive of the said TCS. 2. In the light of the representations received from the stakeholders, the matter has been re-examined in consultation with the Central Board of Direct Taxes (CBDT). The CBDT has clarified that Tax collection at source (TCS) is not a tax on goods but an interim levy on the possible income arising from the sale of goods by the buyer and to be adjusted against the final income-tax liability of the buyer. 3. Accordingly, in S. No. 5 of the Circular No. 07 dated 31st December, 2018 : For 1 2 3 5. What is the correct valuation methodology for ascertainment of GST on Tax collected at source (TCS) under the Provisions of the Income Tax Act, 1961 ? 1. Section 15(2) of JKGSTAct specifies that the value of supply shall include any taxes, duties cesses, fees and charges levied under any law for the time being in force other than this Act, the SGST Act, the UTGST Act and the GST (Compensation to States) Act, if charged separately by the suppplier. 2. It is clarified that as per the above provisions, taxable value for the purposes of GST shall include the TCS amount collected under the provisions of the Income Tax Act since the value to be paid to the supplier by the buyer is inclusive of the said TCS. 5. What is the correct valuation methodology for ascertainment of GST on Tax collected at source (TCS) under the Provisions of the Income Tax Act, 1961 ? 1. Section 15 (2) of JKGST Act, specifies that the value of supply shall include any taxes, duties cesses, fees and charges levied under any law for the time being in force other than this Act, the SGST Act, the UTGST Act and the GST (Compensation to States) Act, if charged separately by the suppplier. 2. For the purpose of determination of value of supplyunder GST, Tax collected at source (TCS) under the provisions of the Income Tax Act, 1961 would not be includible as it is an interim levy not having the character of tax. 2. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the undersigned. (Sd.) P. K. BHAT, KAS, Commissioner, State Taxes, Jammu and Kashmir.